A valuation helps you, the shareholders, and potential investors understand the company’s value, which can be relevant under several different circumstances e.g.
- If you are planning a sale of the company it is essential to know its market value in order to determine the right selling price.
- When trying to raise capital the valuation function as the investor’s basis for their final decision.
- If a disagreement occurs within the circle of owners it might be necessary that one of the shareholders retire, in which case a thorough analysis and a proper pricing of his/her shares are crucial.
For this purpose, you need a valuation to arrive at a proper pricing. Thus, a company valuation can be a good investment to better prepare you for any of these situations.
Every company is different which is why the valuation process can be challenging to conduct on your own. How do you determine the value of large investments that do not yet show in the profits? What impact does the organisational structure have on the company’s value? If the company has experienced a considerable growth in the past few years but a more slow or steady development in the past how should that be evaluated in the future? How does it affect the value of the company that the revenue is very dependent on a few large customers? The answers to these questions are all circumstances that make your company stand out and thus the valuation process different from valuations of other companies. Therefore, euroMerger always initiate the valuation process with an overall analysis of the company in question to ensure a tailored and appropriate process.
A valuation process consists of the following steps:
- Company analysis including company activities, external partners, shareholders, management, suppliers, customers, competitors, investments, and the existing market conditions
- Normalisation of earnings
- Separation of estate through calculation
euroMerger Partners thus takes all above mentioned factors into consideration when conducting the financial valuation and we use acknowledged methods that are based on the company’s accounts, profit and loss accounts, and balance sheet.
Furthermore, we offer assistance in determining and evaluating synergies if there is a specific buyer for the company – but the overall company valuation is to be considered isolated from any potential synergies.
When choosing euroMerger to handle the valuation process we will provide not only a calculation of the company’s value but also a thorough explanation of these calculations and the financial assumptions behind.